Point for taking permission u/r 4(4)

[RAM SHARMA]

Dear Experts,

We are registered manufacturer and want to make a modern warehouse near outside the factory for finished goods due to shortage of space in our factory premises.

Kindly tell main point under rule 4(4) for getting the permission from commissionor.

Thanks

[DR.MARIAPPAN GOVINDARAJAN]

Do you mean Rule 4(4) under Central Excise Rules?

[RAM SHARMA]

Under rule 4(4) of central excise rule 2002

[RAM SHARMA]

We want removed excisable goods without payment of duty in our nearby warehouse ununder rule 4(4) of cex rule 2002

[PAWAN BATRA]

Dear Mr. Sharma,

This facility available only when there are exceptional circumstance having regards to the nature of goods and shortage of space and for this you have to file application with the commissioner office mentioning why you need it. It means you have to justify nature of goods ( like seasonal goods, volume of goods) and shortage of space, production and sales has been grown many folds since inception of the factory, operation are as such run only in batches, varieties of products produced etc. Usually this permission is not granted and even if it is granted it will be given on year to year basis generally. As from your email it is evident you want to make a modern warehouse near outside factory, you require this facility for permanent. Justifying the exceptional circumstance in permanent situation is a difficult task and cause a problem. Lastly its entirely depends on Excise Commissioner how he see your case.

[Mahir S]

Yes sir, the reply furnished above is proper. However, there has been many instances wherein such permission has been granted by the department so you too can apply and most probably shall get such permission, with specific conditions thereon such as submission of Bond etc.

There is no any specific format for making such application, however you can make a detailed application attaching ground plan copy, details of storage capacity, rent agreement of storage place etc. Application can be made only after the modern warehouse as suggested is complete and ready as there is no any provision that first you shall get permission and after that you shall construct a storage place.

[PAWAN BATRA]

Please also refer case 2011 (11) TMI 555 - CESTAT NEW DELHI

[DR.MARIAPPAN GOVINDARAJAN]

Thanks Mr. Pawan Patra for give the citation of the relevant case law.

AI Summary

Off-site warehousing under rule 4(4) permits removal of excisable goods without duty only for exceptional space or goods circumstances.
Permission under rule 4(4) allows removal of excisable goods to an off site warehouse without duty only in exceptional circumstances tied to the nature of goods and shortage of space. Applicants must justify operational reasons and support applications with ground plans, storage capacity details and rent agreements. The Commissioner has discretion to grant permission, often subject to conditions such as bond requirements and typically on a limited or year to year basis; warehouse construction should ordinarily be complete before making the application.